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Energy industry shifts focus away from SW Colorado

DURANGO, Colo. (AP) -- An energy company economist says shale-drilling techniques and a decline in nuclear energy have combined to shift attention away from southwestern Colorado, once the center of gas and uranium booms.

Christof Ruhl, chief economist for BP, told The Durango Herald (http://tinyurl.com/kst7pn4 ) that hydraulic fracturing has helped produced an abundance of natural gas from shale formations in locations other than the Four Corners region, which includes southwestern Colorado.

At the same time, in the San Juan Basin, a gas field in the Four Corners, production has been declining since 2003.

"One region's gain is another region's pain," Ruhl said in an interview published Thursday. He was in Denver for a Colorado Oil and Gas Association convention.

Shale oil wells often produce natural gas as a byproduct, which helps energy companies at a time of low gas prices.

"If you have it as a byproduct, basically every price above zero is a good price," Ruhl said.

Many U.S. utilities have switched from coal to cheap natural gas to generate electricity.

"Last year, what we have seen is the biggest replacement of a single fuel with another fuel at least for the last 40 years, probably on record," Ruhl said.

Ruhl said the U.S. then began exporting coal to Europe, where it was cheaper to burn than natural gas, and European natural gas was exported to Japan, which was shifting from nuclear to gas after the 2011 tsunami and meltdown at one of its nuclear plants.

"We had the lowest nuclear production last year since 1984," Ruhl said. "We think the share of nuclear in global energy will remain relatively constant."